Are you looking for the best debt collection agency that offers “no win, no fee” debt collection?
We call this arrangement “no collection = no commission”. When we take on your claim, you have nothing to pay if we don’t get your money back.
But there are some less-than-honest operators with upfront fees and extra charges hidden deep in their terms and conditions.
Here’s how to find the best ‘no win no fee’ debt collection agency.
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Table of Contents
1. Compare Debt Collection Contracts
When comparing no win no fee agencies, set aside some time to read the terms and conditions or the contract.
Some firms may have a very specific type of “good” debt that is handled on this basis. They will expect you to pay for any debt they deem as “bad”, irrespective of if they collect the money or not.
Examples of these types of terms may include:
- Limitations on the value of the debt
- Supposed solvency (or insolvency) of the debtor
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There may also be arbitrary definitions designed not to recover money but to charge clients additional fees. Watch out for these hidden in the contract. They may be called:
- Administration fees
- Membership fees
- Debt placement fees
Sometimes fees need to be paid upfront, and the debt collection agency won’t start work without that initial payment. Consider the risks and rewards before making any payments in advance.
We often see debt collection agency reviews where clients have paid in advance for debt collection and have been left with a further loss. Worse still, they might have an invoice for more additional fees.
2. Be Wary of Misleading Advertising
The ASA has ruled against a debt collection company using the ‘no win, no fee’ line in an advert, but asking new customers to pay an upfront fee based in part on the volume of debt to be recovered.
This is essentially a commission-based arrangement, and the ASA was not impressed:
“We considered knowledge of the fee was likely to affect the economic behaviour of the trader to whom the ad was addressed. Because the ad did not include any indication that an upfront fee applied to the service, we concluded the ad was misleading.”
3. Check for Bad Reviews
Always check reviews from previous clients of the debt collection agencies you’re comparing.
Don’t trust reviews on the website unless they link back to the original source. Ideally, this should be a reputable site like Trustpilot or Google.
Digging into the reputation of the agency might reveal clients whose debt was recovered, but never paid to them. That leaves both the creditor and the debtor out of pocket.
4. Ask About Unexpected Legal Costs
Your debt collection agency should explain the likelihood that additional, chargeable work will be required, and they should be able to explain what will happen.
Who will decide to go ahead? And will you have the opportunity to decline?
If additional, chargeable work is recommended, the debt collection agency should always get your written approval to go ahead with that work. One example may be locating an absconded debtor.
Similarly, if you decide to go to court to recover your money, you will be liable for solicitors’ fees and court charges. But again, we do not make any decisions about issuing legal proceedings. For UK or international debt collection, legal systems vary, and costs can quickly mount.
At Safe Collections, if we recommend any chargeable work, the final decision is still yours. You can decline.
5. Ask About Unexpected Charges for Recovery
There should normally be no fees for recovering an undisputed debt. Under modern legislation, we charge our fees to the debtor rather than asking you to pay them.
The exception to this is if the debtor pays the original invoice amount without including recovery costs. If that happens, we will ask you to pay us as a fixed percentage of the recovered amount.
If the debtor doesn’t pay recovery costs, we’ll charge you a rate that starts from just 5% of any recovered amount for our work done in claiming the unpaid invoice amount back from your debtor.
Crucially, that fee will be agreed with you at the start so you’re fully informed.
It’s worth asking the debt collection agencies you’re thinking of using, because this is a problem that some clients don’t consider at the beginning of the process. Anything you don’t ask about could be an opportunity for a dodgy agency to pile on unexpected fees.
Get a Free Claim Review
Safe Collections offers “no collection = no commission” debt recovery for both international and UK business debts. We’ll also review your claim for free.
For more information, contact us to discuss your situation, and we’ll be happy to explain your options.
